RobecoSAM SDG Credit Income F USD

Evert Giesen is Portfolio Manager Investment Grade in the Credit team. Previously, he was an Analyst, responsible for covering the Automotive sector within the Credit team. Prior to joining Robeco in 2001, Evert worked at AEGON Asset Management for four years as a Fixed Income Portfolio Manager. He has been active in the industry since 1997 and holds a Master's in Econometrics from Tilburg University. Reinout Schapers is Portfolio Manager Investment Grade in the Credit team. Prior to joining Robeco in 2011, Reinout worked at Aegon Asset Management where he was a Head of European High Yield. Before that, he worked at Rabo Securities as an M&A Associate and at Credit Suisse First Boston as an Analyst Corporate Finance. Reinout has been active in the industry since 2003. He holds a Master's in Architecture from the Delft University of Technology. Jan Willem Knoll is an Analyst in the Credit team and covers the Financials sector – both banks and insurers. He joined the Credit team in 2016. Previously, Jan Willem headed the Financials Equity sell-side research team at ABN AMRO. He started his career in the industry in 1999 at APG, where he held several positions including Portfolio Manager of a global insurance portfolio and subsequently a pan-European financials portfolio. Jan Willem holds a Master’s in Business Economics from the University of Groningen and he is a CFA® charterholder.

The fund is established in Luxembourg and is subject to the Luxembourg tax laws and regulations. The fund is not liable to pay any corporation, income, dividend or capital gains tax in Luxembourg. The fund is subject to an annual subscription tax ('tax d'abonnement') in Luxembourg, which amounts to 0.05% of the net asset value of the fund. This tax is included in the net asset value of the fund. The fund can in principle use the Luxembourg treaty network to partially recover any withholding tax on its income.

The fiscal consequences of investing in this fund depend on the investor's personal situation. For private investors in the Netherlands real interest and dividend income or capital gains received on their investments are not relevant for tax purposes. Each year investors pay income tax on the value of their net assets as at 1 January if and inasmuch as such net assets exceed the investor’s tax-free allowance. Any amount invested in the fund forms part of the investor's net assets. Private investors who are resident outside the Netherlands will not be taxed in the Netherlands on their investments in the fund. However, such investors may be taxed in their country of residence on any income from an investment in this fund based on the applicable national fiscal laws. Other fiscal rules apply to legal entities or professional investors. We advise investors to consult their financial or tax adviser about the tax consequences of an investment in this fund in their specific circumstances before deciding to invest in the fund.

Sustainability is incorporated in the investment process by the means of a target universe, exclusions, ESG integration, and a minimum allocation to ESG-labeled bonds. The fund solely invests in credits issued by companies with a positive or neutral impact on the SDGs. The impact of issuers on the SDGs is determined by applying Robeco's internally developed three-step SDG Framework. The outcome is a quantified contribution expressed as an SDG score, considering both the contribution to the SDGs (positive, neutral or negative) and the extent of this contribution (high, medium or low). In addition, the fund does not invest in credit issuers that are in breach of international norms or where activities have been deemed detrimental to society following Robeco's exclusion policy. ESG factors are integrated in the bottom-up security analysis to assess the impact of financially material ESG risk on the issuer's fundamental credit quality. Furthermore, the fund invests at least 5% in green, social, sustainable, and/or sustainability-linked bonds. Lastly, where a credit issuer is flagged for breaching international standards in the ongoing monitoring, the issuer will become subject to exclusion.The following sections display the ESG-metrics for this fund along with short descriptions. For more information please visit the sustainability-related disclosures.The index used for all sustainability visuals is based on Bloomberg Customized BBB-BB rated Global Corporate index, 1-7 years.

October was a weak month for credit markets. Global High Yield Index spreads rose 40 bps to 5.21% and spreads on the Bloomberg Global Aggregate-Corporates Index rose 6 bps to 1.42%. In emerging markets, the CEMBI spread rose 10 bps to 3.38%. The conflict in the Middle East that started with the attack carried out by Hamas on Israel on 7 October dominated news headlines. The event raised concerns about a broader conflict and commodities like oil and gold traded higher during the month. Most companies reported decent quarterly earnings, although many companies reported that economic activity is decelerating. In the US, GDP increased due to healthy consumer spending. Labor markets in the US continue to be strong and employment costs continued to rise. 5Y Treasury yields rose from 4.61% to 4.85%. In Europe, macro data was weaker, with Q3 GDP showing a minor contraction. On a positive note, Eurozone inflation data dropped to a two-year low. The Chinese property sector remains weak, with no light at the end of the tunnel. New home sales remain weak, as consumers are fearful due to the financial distress situation of many developers.

Based on transaction prices, the fund's return was -0.91%. Total return was negative in October, which was mainly driven by the negative impact from duration, as Treasury yields rose over the month. Credit returns made a small negative contribution. Banking made a positive contribution, while basic industry was the main detractor. The weak contribution from basic industry is mainly explained by the poor performance of First Quantum bonds after the turmoil in Panama, where the company operates one of its most important mines. This was only partially offset by the strong performance of chemical company IFF, which announced an asset disposal. In banking, the position in Raiffeisen did well, as the Austrian bank reported strong results in its non-Russian operations. The position in Nexi convertibles did well as the bonds traded up on LBO rumors. An LBO would lead the convertibles to be taken out at par.

The US economy has been remarkably resilient despite the sharpest hiking cycle in decades. The factors that caused the lag in monetary policy transmission have now largely played out. The European economy has not enjoyed the same fiscal impulse and is not immune to weakness in China, a key trading partner. The Chinese economy has shown outright signs of weakness and the level of monetary and fiscal support has been underwhelming. Our expectation is that it is likely that we will see economic weakness going forward. Market consensus and valuations in markets have shifted more towards a soft-landing scenario recently, which we view as unlikely. This is one of the main reasons for us to be cautious at the moment. In investment grade markets we see banks offering the best value, as spreads in this sector price in some recession risk. We remain cautious on cyclical sectors where valuations do not price in recession risks. We remain cautious on high yield exposure in cyclical sectors or with highly indebted balance sheets.